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JGM, Solicitor
Category: Law
Satisfied Customers: 11016
Experience:  30 years as a practising solicitor.
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We are part of a network. One of the network partners has given

Customer Question

We are part of a network. One of the network partners has given notice to quit and we have been offered the opportunity to take on the vacant area. We have been told by the exiting partner that we have to take on their employees through a tupe agreement. We will not be operating from their base and will not inherit any of their customers. We will operate from our existing base which is at least 50mins away from them. Why would we be subject to this agreement? They have given notice to the network and we have been asked to take it on.
Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you for your question.

To determine if there is a TUPE transfer, the relevant definition asks if there is a transfer of an economic entity that retains its identity. The factors to consider include:

Is the type of business being conducted by the transferee (incoming business) the same as the transferor's (outgoing business)?

Has there been a transfer of tangible assets such as building and moveable property (although this is not essential)?

What is the value of the intangible assets at the time of the transfer?

Have the majority of employees been taken over?

Have the customers been transferred?

Is there a high degree of similarity between the activities carried on before and after the transfer?

If the answer to all (or in some cases several of) the above questions is 'yes', it is safe to assume that there has been a transfer of a stable economic entity.

In your case you are not taking on the premises or the customers although the business is presumably the same. From the information you have provided I don't think the economic identity is retained. You are not buying the business. You are simply being given the opportunity to take any business that might arise in the future. That is not a TUPE transfer on the face of it but you may want to take employment law advice face to face before committing to this so that your specific circumstances, the network etc can be examined.

I hope that this gives some guidance to you.

Please leave a positive response so that I am credited for my time.

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